Behind the numbers: Following Scott, Crist jobs and tax-cutting math

TALLAHASSEE — Turn on a TV and you're going to hear Republican Gov.Rick Scottand Democratic challenger Charlie Cristtrying to claim credit for stewarding the state’s tourism- and housing-dependent economy through the worst global crash since 1929.

Scott is staking his campaign on Florida’s unemployment rate, which fell from 11.1 percent when he took office to 6.2 percent in June. And he’s blaming Crist for “governing based on polls” and leaving a mess in his wake.

In response, Crist has said he did “what was prudent” during the recession: raised taxes on smokers and motorists and took billions in stimulus dollars to keep thousands of teachers from getting pink slips.

But in truth, governors have little control over the forces driving consumer spending or business hiring, particularly in Florida where international travel patterns and investment decisions power so much of the flows of economic exchange.

“It’s like an omelet. There are a lot of ingredients that go into this particular outcome,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness.

“As you move from the federal to the state and local level, the tools that politicians have at their disposal to affect the business cycle decrease in caliber.”

Florida’s economic rebound is being powered by the revival of tourism and by low short-term federal interest rates, which are allowing Florida’s housing market to slowly recover.

“I’m not really attributing any of those things to the governor,” said Christopher McCarty, director of the University of Florida’s Bureau of Economic and Business Research.

Here's the only number that may matter on Nov. 4: whether voters feel better off.

McCarty’s lab surveys opinions on the economy and found consumer confidence at 84 percent in July — the highest level of optimism since April 2007, shortly before the global credit crunch began.

The index was at a sky-high 93 when Crist was elected in November 2006 but fell to the mid-60s by the end of his term.

Still, the average level of consumer confidence during Crist’s term was 71.8 percent, not far off the average of 74.8 percent during Scott’s administration so far.

Compare that with the second term of Gov.Jeb Bush, from 2003 to 2006. The average Florida consumer sentiment then was 90.3 percent.

Florida’s current consumer index “is not a great number,” McCarty said. “Historically, we’re about 10 points behind in consumer confidence than we would normally be, post-recession. But I wouldn’t attribute an enormous amount of the credit or blame to the governor’s policies.”

That’s not to say Scott hasn’t been pulling the levers of economic policy. He just doesn’t have many to pull.

Consider: Florida governors have some influence over the $77.1 billion state budget they sign, including dollars for building roads and universities. But they don’t have much say over federal funding that flows through the state budget. State revenue makes up only about 7 percent of Florida’s $750 billion economy, as measured by gross state product.

Governors don’t even have unchecked control over that 7 percent. They have to negotiate a budget with lawmakers, state agencies, the courts, local governments, hospitals that treat a disproportionate amount of poor people, nursing homes and private vendors.

Within that sliver of Florida’s economy, governors can make only minor changes at the margins. They can push to raise or cut taxes or raise or lower spending. They also have to operate within Florida’s tax code, designed to entice the wealthy with no personal income tax. And the constitution requires a balanced budget, barring deficit spending on things the government can’t immediately pay for with taxes.

The only way around that limitation is through bonding, and Scott has walloped Crist for continuing the trend of his predecessors by “maxing out” the state’s “credit card.”

Florida's bonded debt did hit an all-time high of $28.2 billion during Crist's last year in office, but $23 billion of that had already been racked up by prior governors to pay for school and university construction, environmental land purchases, and transportation projects.

Scott has retired more than $3 billion in state debt, much of which was due to be paid off as Florida retired old bonds used to finance environmental purchases.

But Scott also nixed a $2.4 billion in federal stimulus cash for a high-speed rail construction project between Orlando and Tampa, and initially resisted Medicaid expansion which supporters say would have created 63,000 jobs.

Orlando economist Hank Fishkind said job growth has been what economists were forecasting to happen before he took office and "really none" of Scott's policies were fueling Florida's job numbers. “It’s a cyclical phenomenon.”

One of Scott’s levers is taxation, and his ads claim he has cut taxes 41 times. Most of the cuts were relatively minor tweaks.

For instance, Scott pledged to eliminate Florida’s then-$1.7 billion corporate income tax over seven years. Today, the tax brings in more revenue to government than ever.

Scott pledged $2.1 billion in property- and corporate-tax cuts his first year in office. But during four years, he has cut about $880 million in taxes on businesses, shoppers and motorists. His main economic campaign pledge this go-around: making a manufacturing tax cut lawmakers passed last year permanent, saving them about $90 million a year.

His goal underwent a major revision during his first session thanks to resistance from Republican lawmakers and the business lobby. Instead of a $500 million first-year break to businesses, Scott got $29 million.

Scott did sign a budget that delivered a one-year property tax cut of $205.4 million by requiring regional water management districts to reduce their millage-rates. Back-to-school shoppers also got $25.5 million in sales tax breaks during the three-day “holiday” that year.

But that 2011 budget also included an increase in university and college tuition rates by $110 million.

Scott won minor tax breaks for manufacturers and businesses the following two years.

His biggest wins came this year, when lawmakers agreed to roll back motorist fees by $394.9 million, and cut $62.6 million in sales taxes on school and hurricane supplies, child car seats, bicycle helmets, cement mixers, therapeutic pet foods and other niche items with influential lobbyists or legislative boosters.

The governor “has been laser-focused on making Florida the best place in the country to find a job, raise a family and live the American dream,” campaign spokesman Greg Blair said.

Crist, by comparison, pushed through a property-tax overhaul in 2008 that cut local property taxes by about $3.1 billion.

But Crist also presided over more than $2.6 billion in tax increases on cigarettes, gambling and fees on motorists, court users and other services during his four years. He has proposed his own economic steps, including bumping up the minimum wage for contractors who do business with the state to $10.10 an hour.

“People talk about how Florida is doing better, and I guess it is, but there are an awfully lot of people who feel left behind,” Crist said.